Fri. Feb 3rd, 2023

VietNamNet Bridge – Analysts have noted the rapid increase in the sales of
pick-ups recently and predicted the sharper increase in the near future in the
context of the higher sedan ownership registration tax.

 

Vietnam, automobile industry, tax incentives, MOIT, strategy

Vietnam’s pick up market remains very small with the sales just equal to one
percent of the Thai market. However, the market has heated up very rapidly in
recent months.

January 2013 seemed to be the month with the most satisfactory sales of the
member companies of the Vietnam Automobile Manufacturers’ Association (VAMA)
over the last many years.

A report of the association showed that 196 pick ups were sold in the month, not
including the sales of Nissan Navara. Ford Ranger was the leading brand with 126
products sold, while its rivals could sell less than 50 products a month.

In Thailand, nearly 500,000 pick ups were sold during the same time, of which
17,951 Toyota Hilux, the best seller, reached the consumers.

The figures show that Vietnam remains a very small market with the modest sales.
However, on the small market, there are up to 7 rivals. All of them are the big
names in the world, including Toyota Hilux, Ford Ranger, Nissan Navara, Mazda BT
50, Isuzu D-Max, Mitsubishi Triton and Chevrolet Colorado.

Most popular pick up models have been available in Vietnam, except Tata Xenon
only.

In Thailand, Toyota Hilux and Isuzu D-Max have been taking turns to lead the
pick up market with 60 percent of the market share. In Vietnam, the 7 rivals
have to compete fiercely with each other, while no model can dominate the market
yet.

Analysts say the Vietnamese pick up market has been developing slowly because of
the Vietnamese people’s unfamiliarity to picks up, and because of current
regulations.

Pick ups were considered as “trucks” which had big sizes, therefore, they were
prohibited to roll on the streets in big cities. Disagreement also existed about
if pick ups should be considered passenger carrying vehicles or cargo vehicles.
The disagreement among ministries and branches has led to the disagreement in
setting up the vehicle ownership registration tax rates.

However, things are getting quite different recently. Under the latest decisions
of competent agencies, the import tariff on pick ups is just 5 percent, much
lower than the 83 percent on sedans or SUVs. Meanwhile, the ownership
registration tax on pick ups is just 2 percent, while other vehicles are imposed
10-20 percent.

The lower tax has made it more beneficial to own picks up than sedans.
Especially, customers have been attracted by pick ups partially because of the
wide range of products for choice.

Manufacturers have recently launched the next generation pick up models with the
modern designs and equipments not inferior to modern sedans. Therefore, the
preconception of Vietnamese people about picks up has been erased.

Analysts have said they can see the big opportunities for automobile
manufacturers to boost the sales of pick ups in Vietnam.

This may be the reason why many big manufacturers have introduced their pick up
models in Vietnam. There are 7 pick up models available in the market. All of
them are mid size products with the cabins designed in a way which allows
carrying both passengers and cargoes. They have diesel motor with the cylinder
capacity of 2.2-3dm3.

DNSGCT

By vivian